Tom Gorman - CEO Brambles - Leading an International Organisation

Yesterday I enjoyed a luncheon with the Australian German Association where Tom Gorman, CEO of Brambles was key speaker.

His topic of conversation was "One Company, 50 Countries: Leading a Multinational Organisation"

Now I haven't mentioned this before - though the food at AGA luncheons is always impeccable - as you would expect from the Union, Universities and Schools Club on Bent St

So while we were enjoying our crispy fish, Tom filled us in on his thoughts. He started by explaining his history stems from New York with an education at Harvard - so please don't hate me.

Fair call, given how Aussie's tend to give Yankees and Harvard alumni a bit of a hard time - unless they have ventured there themselves.

So Tom began by saying his speech had been impacted by the recent global adjustments - stocks and riots.

As Tom explains via the old Chinese curse:

May you live in these interesting times

And via Mike Tyson:

Everyone has a plan until you are punched in the face

And so is life we lead in a global economy that Tom went on to describe - with relevance to Brambles...

Now for those of you that do not know Brambles, their business started off with a butcher - Walter Brambles - who started working with logistics and meat.

You may know one of their core services - CHEP pallets - you know - those pallets with blue paint that hold so many of the things we consume.

Notice I say service - they own millions of these pallet products - though they provide a service - basically rental of their pallets

Now for investors, you may be concerned that they have recently written off over 300 million of these pallets - though that is really irrelevant - as every year 6-8% of their pallets are replaced or lost and their model takes that into consideration.

Some people use pallets to make the base of a bed - as seen in recent Home renovation TV shows in Australia...

Global Takeover

Brambles undertook a major takeover - IFCO - similar business that also specialises in RPC's (Reuseable Cardboard Packaging) like some of the boxes you will see in retailers like Woolies.

So, now you understand the basics of their business - they provide logistical solutions that help companies improve efficiency and competitive advantage - which is a key innovation leading to corporate profits worldwide.

The Importance of People

Tom started his interesting story about how to lead an International organisation with the importance of people and encouraging traversing between cultures

It is important always to make things simple and easy to enable movement and change

Mobility of executives is also seen as important by Tom. Put key executives in areas of stress with different economies so they can learn new innovations to get result

Transfer of talent also avoids uneccessary reinvention.

For example,

Tom brought a senior exec from South Africa (and his family) to Istanbul where he could work with a younger key staff member - who has now learnt and is growing - ready to replace and take over

Key Factors

Tom believes that the best structure and strategy revolves around the best people

People must be bright, well educated and 'personable'

They must maintain curiosity - including a desire for success

An interest in change is key and a refusal to do things 'the way they should be done' has exceptional benefit.

As a Leader - Tom's Rules

• People issues are your most important component of competitive advantage
• Spend a lot of time on the road - speaking with your people
• Deal with people who can cross borders
• Find the right mentors and be willing to mentor others
• Understand that your travels will be challenging and sometimes scary

As we were lead into question time, Tom gave a few more insights...

• Maintain management at senior levels during takeover - you need cultural understanding and acceptance - lock top executives into long term future contracts to help with the transition of ownership
• Management is like an egg -
  Control (squeeze) it - it breaks
  Drop it - it breaks
  Be careful with your global management
• Western and Eastern culture are different. China and India are not palletised economies - need to be approached differently and large organisations like P&G are leading the way with the knowledge once palletisation is accepted and at least 1 day can be removed from the supply chain?
• Not every Australian business is hit by currency fluctuation - a business like Brambles working in 50+ countries receives revenue in many local currencies
• Every executive approaches business differently - a strong process is important to encourage a global story that is encouraged by senior leaders who travel - meet people - as people are the core of business

A final message from Tom was...

He was thrown in the deep end when working with Ford - a common theme of employers who look for executives to sink, swim or grow

His concept is to throw executives a line when they are thrown into the deep end - once you make the decision as CEO to throw them to the sharks you MUST support them - often against others wishes...

If you liked this interview, you are also likely to enjoy other reports we have done with AGA presenters, including...

A Luncheon with Michael Ullmer - Deputy CEO NAB

A Luncheon with Graeme J Kraehe - Chairman Bluescope Steel and Brambles

A Luncheon with Dr Bob Every - Chairman of Wesfarmers and Boral

A Luncheon with Bill Evans - Chief Economist for Westpac

A Luncheon with Professor Roy Green - Dean - Business UTS

A Luncheon with Graham Bradley - President, Business Council of Australia

To receive your Total Executive benefits when registering for future events, mention Total Executive when you contact:

Mathias Kopp

Director, Advisor & Investor

Mob:        +61 417 692 858       

Office:      +61 2 9016 4057      

Fax:         +61 2 9475 4348

Another Directors Report by Grant Crossley